Analysts report a continued fall in townhouse rentals in the heart of Ho Chi Minh City as a result of the year’s slowing economic growth.
Landlords had to lower their asking rates in order to keep their tenants because of the over 30% decline in pricing brought on by the closure of numerous stores in the city centre due to poor sales.
Property owner Nguyen Thai Phong told Viet Nam News that he had to lower the rent for his spa salon space from over 100 million dong per month to 65 million dong per month. He is located on Nguyen Trai Street in District 1. He asserted that in trying circumstances, both landlords and tenants must engage in negotiation because failure to do so would be detrimental to both sides.
A number of the downtown area’s streets, including Ly Tu Trong, Hai Ba Trung, Truong Dinh, and Nguyen Trai, which were once crowded with establishments like hair salons and clothing stores, now have a large number of abandoned stores. Due to difficult economic conditions, demand for rental homes in the country’s largest city’s central area has declined by 6%.
In the city’s core streets, townhouse rents have decreased by 8% on average since 2019, citing a poll by the real estate company Savills. According to Savills, the total leased area in the city core has decreased to its lowest level since the fourth quarter of 2022.
Real estate specialists have blamed the slowing economic development and a shift in customer behaviour towards online shopping as the causes of the commercial property rental market’s weakness. In order to draw renters, landlords have been compelled to lower rent by 20% to 30%. Rents, according to independent real estate expert Le Quoc Kien, will barely 80% of 2019 levels by the second quarter of 2020.
Future investors should be aware of the rents in the area and make plans appropriately, he advised. Tenants are now in a position to negotiate much cheaper rentals due to an excess of available houses and a decline in demand. The arrangement has given tenants additional options, but it presents difficulties for landlords who are having trouble renting out their buildings.
According to District 7 real estate dealer Nguyen Viet Tuc, “the future of the rental market in downtown Ho Chi Minh City remains uncertain.” Townhouse rents in the city’s core neighbourhoods decreased, which was a reflection of the post-pandemic real estate market’s overall economic impact.
